A report from CBS 8 in California. “‘Sellers are getting a little spooked. They’d like to take their money off the table, take the risk off the table and as a buyer, if you can position yourself correctly you can get a good deal,’ said Chad Baker, a mortgage lender. He said just this week a property in Encinitas that was listed for $1.9 million accepted an all cash offer of $1.35 million. That’s about a 30% cut. According to the San Diego Association of Realtors, the median price of a single family home in the county dropped by 5% last month to $910,000.”
The Los Angeles Times in California. “The 6% mortgage is back. The jump — the latest in a series of mortgage rate increases this year — has the potential to further pump the brakes on a slowing housing market and make it more likely home values will decline. ‘It shrinks your buying ability,’ said Jeff Lazerson, president of brokerage Mortgage Grader. ‘A lot of borrowers are saying: ‘Forget it.’”
The Easy Valley Tribune in Arizona. “Crazy times have hit the Valley’s residential market these days, judging by some of the latest data posted by The Cromford Report, the leading analyst of the Phoenix Metro housing market. The report said sale prices had dropped below final list prices, prompting it to warn this ‘confirms that sellers’ negotiation power is far weaker than it has been in many years.’ One aspect of the market the Cromford Report singled out last week was the number of houses owned by iBuyer companies like Opendoor.”
“‘We do have excessive inventory of empty homes in the hands of iBuyers,’ it said. ‘They continued to buy homes in large numbers during the second quarter and have ended up with far too many homes in their possession during the third quarter. These homes are empty and racking up expenses,’ it continued, adding their inventory ‘has to be driven lower.’”
“It noted that Opendoor is slashing prices to reduce that inventory, but that’s resulted in impacting the overall market – and the pocketbooks of sales agents. ‘With lots of bargain homes on offer below market value, this is partially succeeding in moving homes from active to pending, but it also has the effect of lowering average prices for the market as a whole,’ it said, calling Opendoor ‘large enough to be a significant competitor for other sellers. This discounting also has the unpleasant side-effect of lowering the intrinsic value of the remaining unsold inventory.’”
“And that means, it said, ‘It certainly is bad news for people who depend on healthy sales volume for their income. This includes title company staff, real estate agents and mortgage lenders.’”
The Denver Post. “‘What a difference a few months make. The shift is here, and it is moving fast,’ said Colorado Springs-area Realtor Patrick Muldoon in comments included with the report. ‘Buyers have most of the power now, but are either patient or not interested. After all, why would they be? Every day is a news cycle of bad economic news ranging from stocks, inflation, layoffs and housing data.’ The inventory of homes available for sale rose sharply year-over-year in most counties and more than doubled in two counties — El Paso, up 117.6%, and Broomfield, up 112.1%.”
From Count on 2. “Despite higher sales prices than in previous years, asking prices have come down in the Charleston area–about 30% of sellers dropped their asking price in July according to Redfin. ‘We’re seeing price corrections,’ Incoming President for the South Carolina Realtors Association Rob Woodall said. ‘Now that the market is starting to normalize, people aren’t going to pay an over-asking price because they’re coming back down to what the market will bear and what the house will appraise for.’”
KXAN on Texas. “The August report from the Austin Board of Realtors showed the Austin-Round Rock Metropolitan Statistical Area housing market continued its stabilization trend for the third consecutive month. Active listings increased by 170.2%, which caused the highest inventory level (2.9 months) since September 2018. ‘Austin, along with the other Texas metropolitan areas, may continue to feel the effects of the previously unsustainable housing market due to the lack of inventory,’ said Mark Sprague, the state director of information capital at Independence Title.”
The Free Press in Minnesota. “Recent months of sales declines have cooled the frenzy of buyers bidding up homes to above the asking price. ‘The crazy speculation has stopped,’ said Mankato Realtor Jason Beal. ‘People aren’t buying homes without inspections and no contingencies like they were, so there’s a more balanced market.’”
The Washington Examiner. “Homebuilder confidence has plummeted over the past few months. About 1 in 5 of the homebuilders surveyed reported slashing prices in the last month to limit cancellations or increase sales. Desmond Lachman is a senior fellow at the American Enterprise Institute who has been warning for months that the housing market is in a bubble. He told the Washington Examiner that what economists and homebuilders are seeing right now is that bubble popping.”
“Lachman said the housing market decline portends a recession because its effects ripple out into all parts of the broader economic landscape. ‘The housing market is slowing, and as it slows, that spreads to the rest of the economy,’ Lachman said. ‘The builders will get laid off, then they won’t go to restaurants, they won’t buy goods, and so on.’”
From Bloomberg. “Canadian home prices marched lower for the sixth straight month. ‘You have kind of a standoff, where a seller comes to the market, can’t get what they want because the market just can’t support the prices that we saw a couple months ago, and they pull the listing,’ said Robert Kavcic, a senior economist at Bank of Montreal. ‘From an affordability perspective, prices have to grind lower, and sellers are going to have to accept that.’”
The Daily Hive. “The ‘unprecedented‘ price drop expected to hit Canada’s housing market in 2023 seems to have already made its mark in Toronto, as a luxury Yorkville condo just sold for a staggering $1,095,000 under the asking price. Suite 4401 at 50 Yorkville Avenue was originally listed at $7,495,000 when it hit the market on July 11. It sold just over two months later, on September 13, for $6,400,000.”
The Evening Standard in the UK. “Homes in London’s most desirable addresses are almost 50 per cent cheaper in dollar terms than they were at their peak in 2014, according to new research. The weakness of the pound against the greenback over recent years means that hugely expensive areas such as Knightbridge, Chelsea and Notting Hill are all seen as ‘good value’ by wealthy foreign investors. Prices in ‘super prime’ areas reached a high eight years ago before then Chancellor George Osborne slapped far higher stamp duty rates on high value properties.”
DW on Germany. “If you want to know the state of the German economy, just count the number of customers in Nikolaus Bode’s shop. The formula for working this out is fairly simple: If the pawnbroker in the small western city of Siegburg isn’t very busy, the whole country is doing well. But if people are breaking down his doors, that indicates some kind of crisis. This September, Bode has been so busy he can hardly think. And that means Germany is in a mess. ‘A pawnbroker is an indicator,’ Bode told DW. ‘People come here when there is a lot of unemployment or severe economic problems.’”
“‘When the final power bills eventually come and the monthly payments increase accordingly, I expect an influx,’ Bode predicted. ‘The amount of foreclosures is also going to rise rapidly because people simply won’t be able to pay for their homes.’”
The Reporter Ethiopia. “‘The housing appreciation rate this year is appalling. As nobody knows where the devaluation will stop, nobody knows where the end of the housing price bubble is,’ said Biruk Shimelis, deputy general manager at Flintstone Homes. The standard housing sales price currently is between 100,000 and 300,000 birr per square meter. This is a dramatic increment from around 30,000 birr per square meter last year. To make things worse, experts say investors’ disinterest in keeping their money in birr is already wreaking havoc on the whole economy. ‘The price bubble does not stop at property. It has a domino effect on other services and goods,’ Biruk added. ‘The economy is in its worst shape and is now like a car that has lost its brakes.’”
From Forbes. “Pan Sutong’s empire at its peak had few rivals. The 59-year-old property mogul had once amassed a $12.2 billion fortune that included a palatial mansion in Hong Kong virtually next door to the city’s wealthiest person, Li Ka-shing. He owned vineyards in California and France, as well as a horse-breeding and training ground in Australia stretched across more than 1,200 acres. His master plan was to build Goldin Metropolitan, a sprawling mini-city in Tianjin, a port of about 14 million people some 85 miles southeast of Beijing. His project would encompass 12 tower blocks, 33 mansions and the tallest skyscraper in China, rising 117 stories into the air.”
“But Pan’s plans are now unraveling under a mountain of debt. Work on his pet project has largely ground to a halt and creditors are seeking the liquidation of his companies in both Hong Kong and Bermuda. Even his mansion in Hong Kong had to be remortgaged multiple times to raise much-needed cash. A unit of Deutsche Bank has filed a petition in Bermuda to apply for the liquidation of Goldin Financial Holdings, the Hong Kong-listed firm that holds Pan’s wine, finance and real estate development businesses.”
“‘He has to find a way to pay off those debts, or reach a new agreement with the lenders,’ says Kenny Ng, a securities strategist at Everbright Securities. ‘Otherwise, he has no choice but to go bankrupt.’ Yan Yuejin, research director at the Shanghai-based E-house China Research Institute, says Pan will seek to avoid selling the assets and plots of lands in Tianjin to repay creditors because doing so would amount to acknowledging failure. It would also mean breaking up his real estate company.”
“‘The Tianjin project is grandiose, and it’s hard to give up for Pan,’ Yan says. ‘But if everything else fails, then he needs to sell it in exchange for cash to solve his debt problems.’”